Across the UK, retail landlords have collected 54% of the rent they were owed for the December quarter © Bloomberg

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Land Securities, one of the country’s biggest landlords, has received just a third of the rent it is owed by retailers in its properties, underlining the serious knock-on effects of enforced shutdowns on the sector.

On Tuesday, the group said it had received just £5m of the £14m owed by regional retailers and £2m of the £7m due from retail, leisure and hospitality businesses in London to cover the 3-month period from December 25. Some of that rent has been deferred to give tenants breathing space.

British Land, another big commercial landlord, said on Monday it had collected less than half the rent owed for the same period.

Across the UK, retail landlords have collected 54 per cent of the rent they were owed for the December quarter, according to property data company Re-Leased.

As of the start of January, all non-essential shops in the UK have been forced to close, to try to combat the spread of a highly contagious variant of the virus that causes Covid-19.

For landlords, there is little certainty on what the market will look like after the pandemic. “It’s still very hard to gauge where rents will move. There are some locations where they could still fall by another 25-30 per cent . . . there’s a lesson to be learnt in terms of what this means for cash flow,” said Colm Lauder, an analyst at Goodbody.

Landsec and British Land have both recently appointed new chief executives and signalled they are planning to sell off retail property, where valuations have fallen steeply.

According to Mike Prew, an analyst at Jefferies, because landlords held on to shops after the 2008 financial crisis to generate income, this left them exposed to structural decline.

“There are a lot of assets which don’t have a part to play in Landsec and British Land’s forward strategy, particularly in retail, and they should not be afraid to sell below book value. With new CEOs there’s a chance to show they can break with the past,” said Mr Prew.

Office rents have held up better during the pandemic. Landsec, which owns a big development in London’s Victoria, the One New Change shopping centre, and office development near St Paul’s Cathedral and Deutsche Bank’s new offices at 21 Moorfields, has received 87 per cent of the rent it is owed by office occupiers for the current quarter.

Derwent London, a specialist office landlord focused on the capital, also announced on Tuesday that it had received 87 per cent of the £40.9m owed by office tenants. Shops and hospitality businesses in the company’s portfolio, meanwhile, have paid just 26 per cent of the £3m due for the December quarter.

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